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Quant Strategy Development Playgrounds: The High Performance Database Sandbox

Quant Strategy Development Playgrounds: The High Performance Database Sandbox

As firms continue to add new trading areas and struggle to meet regulatory requirements, high performance databases are becoming increasingly vital.

By
Adam Honoré

Boston, MA, February 3, 2010 – A new report from Aite Group, LLC examines the needs, risks, trends, and key vendors associated with high performance databases in quantitative trading. The report is based on Aite Group interviews with a dozen quantitative trading firms worldwide, including hedge funds, proprietary trading firms, high frequency trading firms, and tier-one banks, as well as five leading providers of high performance databases for strategy development.

The market's demand for data capture and analysis is increasing. Quant firms currently capture between one and a half and 100 gigs of compressed data per day, and 60% of quant firms run at least one strategy requiring both historical and real-time data simultaneously. Additionally, an active regulatory environment means that quants' need for stored data will only increase. High performance databases help satisfy both current and pending regulatory reporting requirements, and mine data for new opportunities.

Aite Group also sees quantitative trading expanding into new areas. Without exception, every quant firm interviewed plans to move into new arenas in 2010, with nearly half planning to move into equities or add equities from a new market, such as Europe or Japan, and/or add FX capabilities.

"High performance databases are the twenty-first century data warehouse, capable of mixing both historical and real-time data in both request/response and pub/sub playback," says Adam Honoré, research director with Aite Group and author of this report. "To that end, flexibility and performance are key factors for HPDB usage."

Sixty percent of firms currently choose to build their own high performance databases, bypassing vendors, and leaving a sizeable portion of the market open to explore vendor options. The report profiles and rates five leading providers of HPDB: Kx, OneMarketData, Sybase, Thomson Reuters (Vhayu Technologies), and Vertica Systems.